Tribune's largest creditors oppose settlement, exclusivity extension

By Lisa Kerner

Charlotte, N.C., April 12 - Tribune Co.'s largest creditors said the company's announcement last week that it had settled leveraged buyout-related causes of action was "premature and misleading," according to a filing with the U.S. Bankruptcy Court for the District of Delware.

The credit agreement lenders, holding over $3.6 billion principal amount of credit agreement claims outstanding, want the court to terminate Tribune's exclusive period to file a plan of reorganization to April 30 from March 31, the filing said.

A hearing on the exclusivity extension is scheduled for April 13.

As previously reported, Tribune said it had reached an agreement that would settle all potential claims arising from its 2007 going-private transactions and is supported by major creditors J.P. Morgan and Angelo Gordon, Tribune's pre-bankruptcy senior credit facility and senior noteholder Centerbridge Partners.

Tribune said the terms of the settlement, which is also supported by the company's official committee of unsecured creditors, will be incorporated into its plan of reorganization.

Under the plan, senior noteholders would receive 7.4% of the company's distributable value, which would be paid in a combination of cash, debt and stock. The company's senior credit facility lenders would receive cash and debt, as well as stock representing in excess of 91% of the equity of the reorganized company.

Tribune, a Chicago-based media company, filed for bankruptcy on Dec. 8, 2008 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 08-13141.

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